Ukraine Miners Strike

A TWO-DAY STRIKE in mid-November 1995 by coal miners in Ukraine's Donbas coal
fields toppled the Ukranian coal industry minister, a hold-over from the Soviet
era, and highlighted the wretched conditions in the nation's coal mines.

One hundred thousand miners from 21 mines in the Donetske basin dropped their
picks on November 14 to demand back pay for wages from August totaling some
$112 million. The strike was called by the Independent Miners' Union (IMU),
which represents miners in 62 of Ukraine's 246 coal mines. Twenty-four members
of the IMU also staged a 10-day hunger strike on November 1 at the office of
Coal Industry Minister Viktor Poltavets.

In addition to immediate payment of back wages, the miners demanded that the
government: raise pensions to 85 to 90 percent of the average wage; pay unpaid
disability benefits; and reform the coal industry ministry to meaningfully
transfer decision-making power over the industry from the ministry to the
miners.

Mykhailo Volynets, head of the IMU, called on the government of Prime Minister
Yevhen Marchuk to adopt a program "reforming the coal industry by giving
control to unions and passing measures protecting the social well-being of all
miners." Volynets says these changes could only be realized with the changing
of the guard at the coal industry ministry.

The strike was not supported by the powerful Union of Coal Industry Workers,
the Donbas Independent Miners' Union, the Republican Union of Engineer Workers
or the regional Donbas Strike Committee. Instead, those unions threatened to
press for the resignation of the Ukrainian president if the government did not
pay back wages, increase subsidies to the coal industry and fire Poltavets.

On November 15, the second day of the strike, miners agreed to return to work
after the government agreed to pay back wages incrementally. One-quarter of the
back pay was disbursed immediately. On November 20, Marchuk sacked Poltavets,
director of a Donbas coal association prior to the collapse of the Soviet
Union, for not initiating "structural reorganization" of the beleaguered
industry.

Under Poltavets' leadership, independent Ukraine's coal industry ministry sank
deeper into debt and failed to increase coal production. Four-fifths of
Ukraine's aging coal mines were subsidized by the government; only one-fifth
turned a profit. Coal production in 1994 was down to 94 million metric tons,
less than half the amount extracted in 1988 under the Soviets. Coal production
is estimated to have dropped to 85 million metric tons in 1995.

None of Ukraine's coal mines have been privatized, despite the country's slow
movement to a free-market economy, and the ministry continues to hold a tight
rein over the industry. The coal industry ministry continues to regulate the
price of coal, distributing returns to profit-generating mines and effectively
eliminating competition.

Appointed by President Leonid Kuchma on December 1, the new coal industry
minister, Serhiy Polyakov, has promised to give the mines some form of
independence without completely decentralizing the industry. The 49-year-old
Polyakov, formerly the mayor of the city of Torez in Donetske Oblast, has
proposed regulating the industry on a regional, as opposed to national,
level.

The miners' demands in 1995 for social protection and decentralization are
reminiscent of the demands made by their predecessors during the massive coal
miner strikes of July 1989 in the Kuzbass and Donetske basins. The first major
workers' strike in Soviet history, the strike of 1989 posed a serious challenge
to the Gorbachev administration and sparked the eventual dissolution of the
Soviet Union.

According to David R. Marples' Ukraine Under Perestroika, at that time,
the Soviet government agreed to honor the strike committee's demands for full
economic and judicial independence, improved safety measures and medical
treatment for injured and ailing miners, the right to sell their products both
within and outside the country at a price higher than the current official
rate, and the right for local enterprises to determine any changes in wage
scales and work norms. A year later, with the government failing to implement
many of the agreed upon reforms, mass demonstrations again rocked the Donbas,
forcing many Communist people's deputies in the Ukrainian Supreme Soviet to
vote for Ukraine's Declaration on State Sovereignty in July 1990.

While the miners' demands became more political with time, their basic protest
against the deplorable conditions in Ukrainian mines remained constant. In the
mid-1980s, many of the coal mines in the Donbas coal fields had already reached
a dilapidated state. Easily available coal had been extracted, so what remained
lay in thin and sloping seams more than 1,200 meters underground. A 1988 study
conducted by the Department of Heavy Industry within the Central Committee of
the Communist Party of Ukraine revealed that 75 percent of mines in the Donbas
had not been reconstructed in 20 years.

Independent Ukraine inherited the ailing coal mines and could not afford to
infuse sufficient capital to reconstruct them. Now, Ukrainian coal faces a
serious competitiveness problem. Ukrainian coal has a 40 percent higher sulfur
content than world standards and is 30 to 50 percent more expensive than
Russian coal, prompting Ukrainian metallurgical and power plants to claim that
it is more convenient for them to import from Russia.

Major reforms seem inevitable if the industry is to become viable. The World
Bank has announced it will assist Ukraine in its effort to restructure the coal
industry with an $80 million loan in 1996 to develop profitable mines and close
down others. World Bank President James Wolfensohn, who visited a Donetske coal
mine during a November 16 to18 visit to Ukraine, said the Bank would support
industry restructuring because "conditions in many pits were unsafe and would
not be accepted in many countries."

The British firm Longwall also has agreed to loan Ukraine $11 million to
purchase conveyer belts and reconstruct three mines in Donetske.

In November 1995, Deputy Prime Minister Pavlo Lazarenko suggested that 80
Ukrainian coal mines could function independent of government support, 150 need
to be subsidized, and 64 should be closed. Presidential Adviser Oles Bodnarchuk
cautioned, however, that Ukraine cannot abandon its miners. "The state cannot
renounce its own coal nor its miners. This affects the fate of millions of
people."

-- Khristina Lew

The U.S.-Salvador Gap

Yielding to mounting criticism from consumers, labor organizers and activists
over human rights abuses in Central American maquiladoras,
The Gap, Inc.
has become the first major multinational retailer to agree to independent
monitoring of its contractors.

On December 15, 1995, representatives from The Gap and the National Labor
Committee Education Fund in Support of Worker and Human Rights in Central
America (NLC) signed an agreement which granted observers from the Human Rights
Ombudsman Office in El Salvador, the Washington, D.C.-based Interfaith Center
for Corporate Responsibility (ICCR) and other human rights groups access to the
plant of The GAP's Salvadoran contractor, Taiwanese-owned Mandarin
International, and laid the foundation for a system of continued third-party
monitoring, as yet not finalized, to assure Mandarin's compliance with The
Gap's "Guidelines for Vendor Conduct." The Gap has stopped placing orders with
Mandarin, and has agreed to resume them only when Mandarin and the government
of El Salvador "demonstrate an ability to effectively investigate and resolve
labor disputes fairly, justly, and promptly," and ensure "that our orders will
result in humane and productive employment in El Salvador."

"The Gap has now set a new standard for the protection of human rights --
especially the rights of women and workers," said Charles Kernaghan, executive
director of the New York City-based NLC. "The Gap listened to its consumers and
has taken a significant step in accepting direct responsibility for how and
under what conditions its products are made."

Kathleen Bertlesen, a spokeswoman for The Gap, emphasized that the agreement
applies only "to independent monitoring of the company's contractors in El
Salvador." She declined to comment on whether The Gap would permit similar
monitoring of its other overseas contractors. According to its 1994 annual
report, The Gap purchases 70 percent of its merchandise from overseas vendors
in 47 different countries.

With its precedent-setting emphasis on enforcement of codes of conduct for
contractors and reliance on third-party monitoring, The GAP-NLC accord could
become a model with far-reaching implications. Maquiladora (assembly
plant) exports have skyrocketed in the last decade, especially in
labor-intensive industries like garment making. Maquiladora exports from
El Salvador to the United States alone rose from $10.2 million in 1985 to $398
million in 1994. The number of Salvadoran maquiladora workers making
goods for the U.S. market increased from 3,500 to 50,000. At the same time,
however, real maquiladora wages fell 53 percent -- to the current 56
cents an hour -- which provides only 18.1 percent of the annual basic needs of
a family of four.

Although many retailers require their contractors to adhere to a corporate
Code of Conduct to ensure that their plants meet minimum health and safety
standards -- The Gap has had such "sourcing guidelines" in place for several
years -- they are rarely enforced in practice, and workers are generally
ignorant of their rights under these rules. None of the Mandarin workers were
aware of The Gap's Code of Conduct, according to Judith Viera, a former
Mandarin employee. Even if it had been posted prominently in the factory, it
would have done the workers little good; the code had never been translated
into Spanish. As part of the agreement reached between The Gap and the NLC, The
Gap's Code of Conduct will be translated into Spanish, Korean and Chinese so
that both workers and plant managers will understand exactly what The Gap
expects of them.

Last summer the NLC conducted a campaign to raise public awareness of the
abuses Central American maquiladora workers regularly endure. In
response to worsening conditions in maquiladoras in Honduras, Guatemala,
and El Salvador took two young maquiladora workers on a 20-city tour of
the United States and Canada. The women's testimony forced many North American
consumers to confront, for the first time, the suffering thousands -- primarily
young women and girls -- bear for fashion's sake. The tour garnered national
media attention and prompted public demonstrations and letter-writing campaigns
to pressure The Gap into taking responsibility for the enforcement of its own
Code of Conduct. "The response was amazing," says Kernaghan. "People were not
only furious -- they wanted to act."

One of the women, 18-year-old Judith Viera, worked in the Mandarin plant
making T-shirts for The Gap. She provided her audiences with a harrowing
description of conditions during her tenure at the Mandarin sweatshop. Although
the workweek was supposed to be only 44 hours long, at least 8 additional hours
of overtime were required and uncompensated. Refusal to work overtime typically
resulted in termination the next day. The drinking water in the plant was
contaminated, and the air choked with dust. During work hours, talking was
strictly forbidden, and loud music was piped into the factory to encourage a
relentless pace. Bathroom visits required special passes, and were restricted
to two per day.

Viera was among the Mandarin workers who formed the Union of Workers of the
Mandarin International Company (SETMI) in February 1995 -- the first legally
recognized union ever formed in a Salvadoran free trade zone -- to protest the
low wages and inhumane conditions at the sweatshop. Almost immediately
afterwards, Mandarin began a coordinated campaign of brutality and terrorism
designed to destroy the union.

According to the NLC, Mandarin "hired two dozen ex-military, plain-clothed,
armed 'security guards.' The women workers were told their union will have to
disappear one way or another, or 'blood will flow.'" Since the creation of the
union, the plant's 850 workers have endured multiple lockouts, more 100 union
members have been fired and union sympathizers have been beaten and threatened
with termination unless they renounce the union.

In entering the agreement with the NLC, The GAP acknowledges the legitimacy of
SETMI and pledges to make Mandarin choose between accepting the union and
giving up lucrative Gap contracts.

Although SETMI is pleased with the agreement, there is some question about how
Mandarin will respond. Kernaghan concedes that "it is still unclear whether
Mandarin will reinstate the fired union workers." And although El Salvador
recently instituted a Labor Code intended to guard against abuses like
Mandarin's, its Ministry of Labor is woefully understaffed and underfunded, and
is currently in little position to enforce its own rules.

It will thus be up to workers and their supporters -- in El Salvador and
around the world -- to keep up the pressure on companies like Mandarin. Ron
Blackwell, an economist with the Union of Needletrades, Industrial, and Textile
Employees (UNITE), says, "The only party in industry that has unqualified
interest in enforcement are workers, and the only party in industry with
unqualified interest in violations are workers." With the workers of the world
watching, El Salvador, as Kernaghan puts it, "could become an example and
inspiration for all of Central America and the Caribbean."

-- Gayle Liles

Tandoori vs. Kentucky Fried

BANGALORE, INDIA -- Taking advantage of market-opening policies in India,
Kentucky Fried Chicken (KFC) opened its first fast-food restaurant in Bangalore
in July 1995. KFC parent company Pepsico chose Bangalore for its India debut
because the so-called "electronic city" was India's fastest growing metropolis
in the 1980s, with a substantial middle class.

Among the first Indians to sample the U.S.-based franchise's "finger-lickin'"
chicken, however, were Bangalore municipal food inspectors. They announced in
August 1995 that they had identified at least one of KFC's secret ingredients:
KFC chicken is 2.8 percent monosodium glutamate (MSG), they said.

More was at stake for the fast-food chain in this announcement than a closely
guarded trade secret. India's Prevention of Food Adulteration Act sets an MSG
food ceiling at 1 percent because MSG has been associated with nausea and
headaches among the general public and, among pregnant women, with retardation
and birth defects in offspring. Bangalore inspectors revoked the food chain's
license and directed police to close the restaurant on September 13, arguing
that KFC exceeded legal MSG limits, illegally failed to disclose its seasonings
and served food "unfit for human consumption."

A statement issued by KFC said that its chicken "is well below the maximum
permissible limit of one percent." Pepsico Senior Research Consultant G.V. Rao
argued that India lacked the laboratory equipment needed to accurately test for
MSG.

Despite the setback, KFC pledged to "go ahead with plans for opening in Delhi
and Bombay," according to Sandeep Kohli, managing director of KFC India
Holdings Pvt. Ltd. "All that we say is let the customer decide," Kohli says.

The chain opened its second outlet on October 20 in Delhi. On November 6,
Delhi officials canceled that restaurant's license, arguing that it contained
sodium aluminum phosphate, which is hazardous to human health. A KFC
spokesperson countered that the food contained no harmful chemicals.

Some Western reports on the incidents have mocked the controversy. "In a
country where sanitation is so poor that people routinely die of diarrhea and
where outbreaks of plague occur, reports now chronicle with considerable
license the potential health hazards presented by Western food," commented an
October 1995 Chicago Tribune news story. But in India, the MSG showdown has
sparked a heated debate over what market, if any, Western fast-food joints
should have.

"Multinational basher" strikes

Promoting highly processed "junk food" in a poor country with widespread
malnutrition is unethical, charges the Karnataka State Farmers Association
(known by the local initials KRRS). KRRS is led by Professor M.D.
Nanjundaswamy, who is known as the "multinational basher" for a campaign he
organized in this south India state against global seed patenting provisions of
the Uruguay Round of the General Agreement on Tariffs and Trade (GATT).

In 1992 and 1993, protesting multinational corporate control over seed
patents, KRRS militants ransacked a Cargill office in Bangalore, burning the
seed company's documents in the streets, and destroyed part of a Cargill office
in the town of Bellary, 300 kilometers outside of Bangalore [see "
Farmers Attack Cargill Seed Plant," Multinational Monitor, September
1993]. Even before food inspectors moved to close down KFC, Nanjundaswamy
threatened to take direct action against the restaurant, helping to convince
KFC to cancel a gala it had planned for its India opening.

"The chicken they serve is full of chemicals, and the birds are given
hormones, antibiotics and arsenic chemicals to fatten them quickly,"
Nanjundaswamy contends. He further charges that processed and fried foods are
high in sodium and cholesterol, contributing to hypertension, heart ailments
and obesity. "One American develops cancer every seven seconds," Nanjundaswamy
says, "and the culprit is processed meat and chicken, served mainly by the
junk-food industry."

A KFC statement counters that, "The only antibiotics given to the birds are
for prevention of any disease. The chickens are not fed on hormones." KFC also
suggests that local Indian government officials maintain an anti-Western bias,
arguing that, if MSG is the real reason for closing down KFC, then the
government should also crack down on Chinese restaurants. KFC critic Maneka
Gandhi, daughter-in-law of the late Prime Minister Indira Gandhi and a former
environment minister, responds that China Garden, Bombay's largest Chinese
restaurant, was closed for that very reason.

"Eighty million Americans suffer from health problems directly linked to food
habits," Gandhi says. "What they serve here is over-priced processed chicken,
which is artificially raised and refried several times." A piece of chicken
sells for a little more than $1 at KFC, more than the daily per-capita income
in India. Activists argue that traditional Indian recipies, such as baked
tandoori chicken, are more nutritious than the new junk-food alternatives.

Quit India campaign

Gandhi has galvanized the opposition of 20 members of Parliament and two
former prime ministers (V.P. Singh and Chandra Sekhar) to oppose the
proliferation of foreign fast-food chains in India. Spurred by a recent
liberalization in Indian laws, Pepsico Restaurants International, which owns
the Pizza Hut as well as KFC restaurant chains, has received permission to open
30 new outlets throughout the country. Burger King and McDonald's are among
others cleared by the Foreign Investment Promotion Board. [see "Fast-Food
Culture," Multinational Monitor, July/August 1995].

Nanjundaswamy and Gandhi argue that this fast-food invasion will encourage
Indian farmers to shift from production of basic food crops to more lucrative
luxury goods such as animal feed and meat, leaving poorer Indians with no
affordable food.

One justification for economic liberalization policies used by the Indian
government is that they will attract multinationals that will create employment
and develop India's infrastructure

But Nanjundaswamy says that fast-food joint "have brought jobs only for a
handful of educated elites and have actually displaced the poor majority,"
Nanjundaswamy says. Venkateswara Hatcheries, for example, is supplying KFC with
broilers after closing down its restaurants in Bombay and Pune as part of a
deal it cut with KFC.

The KRRS agenda goes beyond fast food. It held a convention on November 1 to
protest the invasion of multinationals and the Westernization of local
agriculture. National banks, insurance companies, political parties and
non-governmental organizations supported the convention.

"We need a new Quit India movement," Nanjundaswamy tells these diverse
sectors, referring to Mahatma Gandhi's 1942 campaign against British goods,
"this time against junk-food neo-colonialists."